In today’s briefing:
- Cash-Rich Exedy (7278) Sees Huge Offering Offset by Huge Buyback – Watch For Short-Term Games
- Infocom (4348 JP) – The Meaning of ‘Binding Bids’ and ‘¥250bn’
- HYBE: Block Deal Sale of SM Entertainment
- Yuanta Taiwan Div+ ETF Rebalance Preview: 5 Changes as Names Move Around; US$2.35bn Round-Trip Trade
- Huafa Property Services (982 HK)’s Knockout Offer
- Activism Takes On CMCDI (133 HK)
- Huafa Property Services (982 HK): Scheme Offer at HK$0.29
- Taiwan Top 50 ETF Rebalance Preview: Asia Vital Components (3017 TT) In Back-To-Back Inclusion?
- Best World (BEST SP): Best & Final Offer
- An Early Look at Potential Deletions and Additions to KOSPI200 in December 2024
Cash-Rich Exedy (7278) Sees Huge Offering Offset by Huge Buyback – Watch For Short-Term Games
- Toyota equity affiliate Aisin (7259 JP) last September said it would sell all its crossholdings. That now includes a 36.5% stake in Exedy Corp (7278 JP).
- Today, they announced an offering of all the shares (when including the greenshoe). That is nearly ¥50bn. That is offset by a ¥15bn buyback which could reduce the offering size.
- Games may be played, but there is considerable accretion, and Exedy will see higher float and still-high net cash.
Infocom (4348 JP) – The Meaning of ‘Binding Bids’ and ‘¥250bn’
- A variety of articles of recent from private media sources have suggested that Teijin Ltd (3401 JP) has its 55% stake in Infocom Corp (4348 JP) up for auction.
- According to earlier articles, binding Second Round bids were due last week. According to an article out late last week, binding bids have been made, with some “around ¥250bn.”
- What that means for price may depend on what the “around ¥250bn” means. A brief exploration below.
HYBE: Block Deal Sale of SM Entertainment
- After the market close on 27 May, HYBE (352820 KS) announced that it will conduct a block deal sale of 0.75 million to 0.94 million shares of SM Entertainment.
- The block deal sale price discount is 4% to 5.5% discount to the closing price on 27 May (95,800 won).
- One of the major positive, recent issues facing the Korean K-Pop related stocks has been the potential easing of Korean content restrictions by China.
Yuanta Taiwan Div+ ETF Rebalance Preview: 5 Changes as Names Move Around; US$2.35bn Round-Trip Trade
- With the review period now complete, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- Price changes and changes to dividend estimates have led to names dropping off the list of potential adds and deletes over the last week.
- Constituent changes, capping and funding flows will lead to a one-way turnover of 12.7% and a one-way trade of US$1.17bn. There are 12 stocks with over 4x ADV to trade.
Huafa Property Services (982 HK)’s Knockout Offer
- After entering a trading halt on the 16th May pursuant to the Takeover’s Code, property manager Huafa Property Services (982 HK) has now announced a privatisation by way of a Scheme.
- The cancellation price of A$0.29/share is a 30.63% to last close, a 70.59% premium over the 30-day average close, and a life-time high price. The price is final.
- The Offeror, Zhuhai Huafa, a state-owned enterprise wholly-owned by Zhuhai SASAC, plus concert parties hold 42.63% of shares out. Clean deal.
Activism Takes On CMCDI (133 HK)
- In January this year, Argyle Street, a (now) 8% shareholder of China Merchants China Direct Investments (133 HK) (CMCDI), a closed-end investment company, proposed a solution to boost shareholder value.
- Two months later, Rydal Value Fund (stake unknown) also proposed a means to boosting shareholder value along similar lines.
- CMCDI is currently trading at a ~63% discount to NAV. But it is up 78% since Argyle’s initial proposal, and recently touched a six-year high. Argyle is still buying.
Huafa Property Services (982 HK): Scheme Offer at HK$0.29
- Huafa Property Services Group (982 HK) announced a privatisation offer from Huafa Industrial Co., Ltd. Zhuhai (600325 CH) at HK$0.29 per share, a 30.6% premium to the undisturbed price.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. No shareholder holds a blocking stake.
- The offer, which has been declared final, is attractive compared to historical share prices and peer multiples. This is a done deal, with payment likely in November.
Taiwan Top 50 ETF Rebalance Preview: Asia Vital Components (3017 TT) In Back-To-Back Inclusion?
- Asia Vital Components (3017 TT) could replace Chang Hwa Commercial Bank (2801 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the June rebalance.
- This ETF inclusion for Asia Vital Components (3017 TT) could come back-to-back with another index inclusion scheduled for the end of May.
- Shorts in Asia Vital Components (3017 TT) have been increasing recently while shorts in Chang Hwa Commercial Bank (2801 TT) are near their lows.
Best World (BEST SP): Best & Final Offer
- The $2.50/share Exit Offer announced last month seemed fair. Not great, but okay. Best World International (BEST SP)‘s founders Dora Hoan and Doreen Tan have now blinked, and bumped.
- Terms are S$2.56/share – best & final. The increase in the Exit Offer price followed “a review of its most recent financial and cash position“. More likely, shareholder pushback.
- Elsewhere, nephews and siblings of Hoan, bought shares just prior to the initial Offer announcement; and have been selling since. Not a great look.
An Early Look at Potential Deletions and Additions to KOSPI200 in December 2024
- In this insight, we provide an early look at the potential additions and deletions to KOSPI200 rebalance in December 2024.
- The seven potential additions are up on average 53.9% from end of 2023. The seven potential deletion candidates are down on average 14.2% YTD.
- The average market cap of the seven potential additions is 2.2 trillion won. The average market cap of the seven potential deletion candidates is 0.7 trillion won.
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